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Investing.com - Oppenheimer has raised its price target on Agilysys Inc (NASDAQ:AGYS) to $120.00 from $90.00 while maintaining an Outperform rating on the hospitality software provider. The company, currently valued at $3.25 billion, is trading above its InvestingPro Fair Value, suggesting premium pricing for its growth potential.
The price target increase follows Agilysys’ strong fiscal first quarter results, which showed robust sales performance across its business segments. The company reported record numbers of new customer acquisitions with high attach rates for both its point-of-sale (POS) and property management system (PMS) products. Financial data from InvestingPro shows impressive revenue growth of 16.1% and a healthy gross margin of 62.4%.
Oppenheimer noted that the bookings strength appears broad-based, prompting Agilysys management to raise its fiscal year 2026 subscription revenue guidance. The firm views these results as evidence that the worst challenges in the POS business are now behind the company. InvestingPro analysis reveals 12 additional key insights about AGYS, including its financial health score and growth metrics, available exclusively to subscribers.
The strong performance among independent hotels selecting Agilysys PMS products counters concerns that the company would be overly dependent on its Marriott engagement, according to Oppenheimer’s analysis. This customer diversification validates the product-market fit of Agilysys’ offerings.
Despite the positive outlook, Oppenheimer identified ongoing secular challenges in Agilysys’ hardware business, which created a headwind for raising overall guidance despite expectations for growth in fiscal year 2026.
In other recent news, Agilysys Inc. reported its financial results for the first quarter of fiscal year 2026, highlighting significant revenue growth. The company posted $76.7 million in revenue, surpassing the expected $74.35 million, marking a 3.16% surprise. Despite this positive revenue performance, Agilysys missed earnings per share (EPS) expectations, reporting $0.33 against a forecasted $0.36, an 8.33% shortfall. The company’s strong revenue was primarily driven by a 44.3% year-over-year increase in subscription revenue, with organic growth contributing 24%. Professional services revenue also played a role in the positive results. In light of these developments, Needham has reiterated its Buy rating on Agilysys, maintaining a price target of $130. These recent developments reflect investor confidence in the company’s strategic direction.
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